Tuesday, November 9, 2010

China Isn't Solely a Major Exporter

When it comes to international trade, your students could get the idea from many media stories that China is strictly an exporting power. But this graphic (HT Chartporn) shows some interesting import flows. See if your students can account for them.


Anonymous said...

Hmm... It does seem as if China is all export, no import. But that's not true. China imports from many different countries. It makes sense to import less than to export because they wouldn't want to decrease in GDP. And the imports that they are getting are probably increasing China's productivity, which increases their GDP. That rise in productivity causes them to work more quickly and efficiently. Maybe that's why China exports so much that it seems like they don't import as much.

Tim Schilling said...


When you mention productivity, you are headed in the right direction. Essentially, China is working to its comparative advantage. It has found areas where its opportunity cost in production are lower and thus it has a comparative advantage. Remember, it's not just wages. If wages were all that mattered, the poorest countries in the world would be the industrial capitals. They're not.